MUMBAI: Gordon Reid — the chief operating officer, who oversaw the expansion of Trent’s Star Bazaar retail outlets — is returning to his parent firm Tesco to head its Chinese operations. According to an official Trent release, Mr Reid’s India stint was part of a franchise arrangement with partner Tesco, and he is now moving back. The company said his replacement at Trent will be announced soon. Trent officials that ET spoke to felt that managing director Noel Tata may opt for international expertise until Star Bazaar strengthens its operational set-up in the country. Mr Reid took over at Trent in 2008 after Tesco inked a deal with the retail arm of the salt-to-software Tata Group.

A pharmacist by training, he had worked with Boots for about 15 years earning his spurs in organised retail. He eventually ran the South East of England Region, responsible for around 200 stores. In 2005 he joined Tesco in Central Europe as the COO for their Hungarian business before coming to India. That stint is expected to come to an end on March 1.

Star Bazaar is estimated to have around seven operational stores and plans to scale that up to 11 by end of the year. That figure is slated to touch 50 in five years, according to company plans. Star Bazaar sells fruits, vegetables and non-vegetarian products, dairy, home care, health and beauty products, apparel, home decor, gifts and household items.

Tesco, the world’s third-largest retailer, is currently concluding its supply-chain integration with Star Bazaar as part of its franchise agreement with Trent. Tesco chose Trent as its partner almost two years after calling off talks with the Bharti Group. The wholesale outlets will sell groceries and other goods to small retailers and restaurant owners and supply Star Bazaar, Tesco said. Tesco’s first wholesale store in India is scheduled to open sometime this year. The UK retailer is keen to get a foothold in India where chain-store sales are expected to touch $97 billion by 2012, according to consultant Technopak Advisors. Tesco officials have said the retailer is relying on emerging markets of China, South Korea and India for future growth.

Tony White shares his vision for Australian Franchise Gloria Jean in India

Australian cafe chain Gloria Jean’s Coffees, which forayed into the Indian market through the Dubai headquartered Landmark group’s hospitality 

Tony White, regional general manager, Gloria Jean's Coffees

arm Citymax in 2008, has grown at 23% year-on-year. With 917 cafes globally, the chain expects to brew its way into the Indian market with 100 stores by 2013. Gloria Jean’s Coffees regional general manager Tony White speaks about its lessons from this market and how it is using India as the node to serve countries from Africa to the subcontinent. Excerpts: 

Where does Gloria Jean’s position itself and what has been experience like since its 2008 entry? Gloria Jean’s operates at around 10% premium over the two main cafe players in India, offering 100% arabica beans. Although we position ourselves at the upper end of the mainstream cafe market, we do not want to operate at the price points of international players as it would prevent us from achieving scale. We have grown to a presence of nine stores across Mumbai, Bangalore, Hyderabad and Chennai. Gloria Jean’s India broke even at the retail level two months back and is targeting company-level profitability by 2012. By then the Citymax would have 40 stores in place.

Is there a possibility that your tie up with master franchisee Citymax be extended to subfranchised growth? Sub-franchising is definitely an option to grow. But we will look at branching out into sub franchisees only once we reach a 50 store presence. Although most of our outlets are franchised in Australia, it is usually owned by a couples for whom it is a means of livelihood. They’ve got their skin in the business and are focused on driving sales. But in India, the franchisee does not necessarily run the business. Although we may train him, a lot of factors may get lost in translation when he reaches out to the staff. Consistency of experience is essential to not dilute the brand. 

What is the progress on your roasting facility in Bangalore on stream? We have a long term commitment to this market and are setting up a roaster with a capacity to manufacture up to 12,000 cups per batch by the calendar year end. Being situated in the city, the fresh beans can be easily distributed to our outlets which are largely metro specific. Import tariffs have forced us to source locally and this facility is expected to become a hub for Asia. It will also allow us export to 11 countries across the subcontinent, Middle East and Africa, which were earlier importing beans from Australia. By 2012, 80% of the in house production will serve India while the remainder will be exported.

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